Judge: Kimberly Knill, Case: 30-2021-01177663-CU-OR-CJC, Date: 2023-08-11 Tentative Ruling

Defendant’s Motion for Summary Judgment or, in the Alternative, Summary Adjudication of Plaintiff’s Complaint

Defendant, Specialized Loan Servicing, LLC’s unopposed Motion for Summary Judgment or Alternatively Adjudication is GRANTED.

Defendant’s Request for Judicial Notice is GRANTED.

“The party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law. That is because of the general principle that a party who seeks a court’s action in his favor bears the burden of persuasion thereon. (See Evid. Code, § 500.) There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850 (fn omitted).)

Code of Civil Procedure section 437c(p)(2) states, “A defendant or cross-defendant has met his or her burden of showing that a cause of action has no merit if the party has shown that one or more elements of the cause of action, even if not separately pleaded, cannot be established, or that there is a complete defense to the cause of action. Once the defendant or cross-defendant has met that burden, the burden shifts to the plaintiff or cross-complainant to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto. The plaintiff or cross-complainant shall not rely upon the allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to the cause of action or a defense thereto.”

Once the defendant has met this burden, the burden shifts to the plaintiff to show a triable issue of one or more material facts exists as to the cause of action or a defense thereto.  (Code Civ. Proc., § 437c, subd. (p)(1).) 

Plaintiff did not file an opposition and has submitted no evidence to dispute Defendant’s undisputed material facts.  As will be seen, Defendant has met its burden to show every cause of action has no merit, and Plaintiff has not met his burden to show a triable issue of one or more material facts exists as to any cause of action.

On 3/22/2007, Plaintiff obtained a mortgage loan for $395,000.00, secured by the Plaintiff’s Property via a recorded Deed of Trust. (SSUF 1) The original Lender listed in the Deed of Trust was Bank of America, N.A (BOA). (SSUF 1.) The Loan required monthly payments and should Plaintiff fail to make the required monthly payments, the beneficiary was authorized to exercise a power of sale of the Property and charge fees related to any default. (SSUF 2.)

SLS became the servicer of the Loan on 6/15/2019. (SSUF 3.) BOA assigned the beneficial interest under the Deed of Trust to MEB Loan Trust III, via an Assignment of Deed of Trust which was recorded on 9/16/2019. (SSUF 4.) MEB expressly authorized SLS to conduct servicing actions (including as needed, conducting non-judicial foreclosure actions) related to the Loan. (SSUF 5.) At all times, Plaintiff’s mailing address was the Property address. (SSUF 6.)

After Plaintiff failed to make required monthly payments under the Loan for over ten months (SSUF 7), Plaintiff requested a Loan forbearance from SLS on 4/2/2020. (SSUF 8.) On 4/3/2020, SLS placed the Loan into forbearance effective as of 6/26/2019. (SSUF 9.) The forbearance plan covered 12 months, ending on 6/26/2020, at which time a total of $39,861.03 became due. (Id.) SLS informed Plaintiff of this timeline and the required future payment actions by letter dated 4/3/2020, sent to the Property address. (Id.) Plaintiff confirmed the Property address was the proper address to contact him on a phone call with SLS the day before on 4/2/2020. (SSUF 10.) Plaintiff acknowledged the Loan forbearance on a call with SLS on 4/9/2020. (SSUF 11.) On that same call, the SLS representative confirmed the forbearance end date was 6/26/2020. (Id.)

Via letter dated 5/27/2020, SLS informed Plaintiff the forbearance period was almost over and “depending upon your situation, you may need to extend the forbearance or you may be ready to resume making your payments.” (SSUF 12.) This letter further outlined Plaintiff's options at the time, including extending the forbearance, paying a lump sum, starting a repayment plan, or applying for a loan modification. (Id.) In addition, SLS attempted to contact Plaintiff via telephone, email and letters on numerous occasions prior to the end of the forbearance period. (SSUF 13-15.) Nevertheless, Plaintiff failed to pay the lump sum required at the end of the forbearance period (and failed to make any payments on the Loan until February 2021). (SSUF 16.) On 10/28/2020, SLS recorded a notice of trustee's sale, setting a foreclosure sale for 12/7/2020. (SSUF 17.) In February 2021, Plaintiff made payments sufficient to being the Loan current. (SSUF 18.) SLS has not proceeded with any further foreclosure actions following this reinstatement. (SSUF 19.)

Second Cause of Action for Intentional Misrepresentation

The elements of a count for intentional misrepresentation are (1) a misrepresentation, (2) knowledge of falsity, (3) intent to induce reliance, 4) actual and justifiable reliance, and (5) resulting damage. (Chapman v. Skype Inc. (2013) 220 Cal.App.4th 217, 230–31.)

Plaintiff alleges the following misrepresentations: (1) “Defendant SLS made a material misrepresentation to Plaintiff that his home loan was eligible to be put into forbearance and that Plaintiff would not have to make a payment until further notice from Defendant SLS in the form of a new payment plan if Plaintiff stated that he wanted the loan placed in forbearance, which he did.” (Complaint ¶ 33.); and (2) “Defendant SLS also made a material misrepresentation to Plaintiff that he should not make a payment or take any other action with respect to the loan until he received a phone call from SLS with further instructions.” (Complaint ¶ 34)

The first alleged misrepresentation was not false. The loan was eligible for forbearance and SLS placed the loan in forbearance.

The second alleged misrepresentation was not false. SLS did give Plaintiff further instructions. SLS repeatedly notified Plaintiff that he would have to make payments by 6/26/2020, the end of the forbearance period. The forbearance approval letter informed Plaintiff that he would have to make further payments by 6/26/2020. (SSUF 9.) When Plaintiff called 4/9/2020, the SLS representative confirmed for Plaintiff his forbearance period would end on 6/26/2020 (SSUF 11.) SLS did call Plaintiff and left voicemails on 4/16/2020, 4/22/2020, and 4/23/2020, and Plaintiff did not return any of the calls. (SSUF 15.)  On 5/27/2020, SLS sent a letter stating, “depending upon your situation, you may need to extend the forbearance OR you may be ready to resume making your payments.” (SSUF 12.) On 6/22/2020, SLS emailed Plaintiff, informing him that his “forbearance is scheduled to end soon” and requesting that SLS would like "to help [Plaintiff] make an informed decision on how to move forward."

Third Cause of Action for Negligent Misrepresentation

The elements of negligent misrepresentation are (1) a misrepresentation of a past or existing material fact, (2) made without reasonable ground for believing it to be true, (3) made with the intent to induce another's reliance, (4) justifiable reliance, and (5) resulting damage. (Bock v. Hansen (2014) 225 Cal.App.4th 215, 231.)

This cause of action is based on the same facts as the second cause of action and the same reasoning applies. 

Fourth Cause of Action for Violations of Civil Code §§ 1788 et seq.

“No debt collector shall collect or attempt to collect a consumer debt by means of the following conduct:  . . . (e) The threat to any person that nonpayment of the consumer debt may result in the arrest of the debtor or the seizure, garnishment, attachment or sale of any property or the garnishment or attachment of wages of the debtor, unless such action is in fact contemplated by the debt collector and permitted by the law . . . .” (Civ. Code, § 1788.10, subd. (e).)

Plaintiff alleges SLS violated Civil Code section 1788.10, subdivision (e) "by making the threat to Plaintiff that nonpayment of a debt would result in the sale of the Subject property when such action was not permitted by law (Complaint ¶ 51.)

SLS’s foreclosure actions were lawful. The Loan provided Plaintiff would pay monthly payments consisting of principal payments, interest and escrow items, and should Plaintiff fail to make the required monthly payments, the beneficiary was authorized to exercise a power of sale of the Property and charge fees related to such default. (SSUF 2.)  Plaintiff failed to make payments on the Loan (SSUF 7). SLS was the servicer of the Loan and has been expressly authorized by MEB to act as servicer for the Loan and, as needed, conduct a non-judicial foreclosure sale and execute all "normal and customary documents and acts related to the servicing and foreclosure of mortgage liens, eviction actions, and/or sale of real estate." (SSUF 3 & 5).

Fifth Cause of Action for Negligence/Negligence Per Se

The elements of negligence are (1) a legal duty to use reasonable care, (2) breach of that duty, and (3) proximate cause between the breach and (4) the plaintiff’s injury.  (Mendoza v. City of Los Angeles (1998) 66 Cal.App.4th 1333, 1339.)  “Duty is the expression of a court’s conclusion that a particular plaintiff is entitled to protection.”  (Id.)

Plaintiff alleges SLS owed Plaintiff "a duty of care with respect to the handling and review of his forbearance request" and that SLS breached its duty of care "by failing to process Plaintiff's forbearance and be truthful about his payment options and timing thereof.” (Complaint ¶¶ 62 64.)

There is no duty owed by a lender to a borrower sounding in general negligence principles.  (Sheen v. Wells Fargo Bank, N.A., (2022) 12 Cal.5th 905, 915.) 

Plaintiff’s negligence per se theory also fails. “Section 669 of the Evidence Code codifies the elements necessary to establish negligence per se.” (Capolungo v. Bondi, (1986) 179 Cal.App.3d 346, 349.) Evidence Code section 669 requires the violation of a statute, ordinance, or regulation of a public entity, among other requirements.

Plaintiff alleges SLS violated Civil Code sections 1710, 1788, et seq. and 2924, subdivision (a)(6). (Complaint ¶ 66.)

Civil Code section 1788 is addressed above in the fourth cause of action.

Civil Code section 1710 is “Deceit defined” and states: “A deceit, within the meaning of the last section, is either: ¶ 1. The suggestion, as a fact, of that which is not true, by one who does not believe it to be true; ¶ 2. The assertion, as a fact, of that which is not true, by one who has no reasonable ground for believing it to be true; ¶ 3. The suppression of a fact, by one who is bound to disclose it, or who gives information of other facts which are likely to mislead for want of communication of that fact; or, ¶ 4. A promise, made without any intention of performing it.”

As discussed above, both of the alleged misrepresentations were true and, therefore, cannot be deceit.

Civil Code section 2924, subdivision (a)(6) provides an "agent of the holder of the beneficial interest under the mortgage or deed of trust . . . shall not record a notice of default or otherwise commence the foreclosure process except when acting within the scope of authority designated by the holder of the beneficial interest."

SLS was the servicer of the Loan and has been expressly authorized by MEB to act as servicer for the Loan and, as needed, to conduct a non-judicial foreclosure sale and execute all "normal and customary documents and acts related to the servicing and foreclosure of mortgage liens, eviction actions, and/or sale of real estate." (SSUF 3 & 5).

Sixth Cause of Action for Violations of Business & Professions Code §§ 17200 et seq.

The elements of a cause of action for unfair business practices are: (1) defendant engaged in unlawful, unfair or fraudulent business acts or practices, or unfair, deceptive, untrue or misleading advertising; (2) plaintiff’s entitlement to restitution and/or injunctive relief.  (Bus. & Prof. Code, §§ 17200, 17203.)

“An unlawful business practice or act within the meaning of the UCL is an act or practice, committed pursuant to business activity, that is at the same time forbidden by law. The California Supreme Court has explained by proscribing any unlawful business practice, Business and Professions Code section 17200 borrows violations of other laws and treats them as unlawful practices that the unfair competition law makes independently actionable.” (Bernardo v. Planned Parenthood Federation of America (2004) 115 Cal.App.4th 322, 351-352 (cleaned up).)

Plaintiff alleges the same violations as negligence per se and intentional and negligent misrepresentation. For the same reasons, this cause of action fails because Defendant did not engage in unlawful, unfair or fraudulent business practices.

First Cause of Action for Declaratory Relief

A declaratory relief action requires an actual controversy relating to the legal rights and duties of the respective parties. (Code Civ. Proc., § 1060; All. for California Bus. v. State Air Res. Bd. (2018) 23 Cal.App.5th 1050, 1068.)

“Declaratory relief generally operates prospectively to declare future rights, rather than to redress past wrongs. It serves to set controversies at rest before they lead to repudiation of obligations, invasion of rights or commission of wrongs. In short, the remedy is to be used in the interests of preventive justice, to declare rights rather than execute them. To qualify for declaratory relief, a party would have to demonstrate its action presented two essential elements: (1) a proper subject of declaratory relief, and (2) an actual controversy involving justiciable questions relating to the party's rights or obligations.” (Jolley v. Chase Home Fin., LLC (2013) 213 Cal.App.4th 872, 909 (cleaned up).)

Plaintiff seeks the following judicial determinations and declarations of the Plaintiff's and SLS's respective rights and duties: (1) what amount is owed under the Loan, (2) what are the current repayment terms of the Loan, and (3) that SLS has no present right to conduct a non-judicial foreclosure of the Subject Property. (Complaint, ¶ 30.)

Plaintiff was able to reinstate the Loan by making payments in February 2021. (SSUF 18.) SLS has not proceeded with any Loan foreclosure actions after February 2021. (SSUF 19.) There does not appear to be any actual controversy.

Defendant to give notice and to submit a proposed judgment for the court’s review and signature within 10 days.